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March 4, 2010

Medicaid/CHIP Premium Assistance Notice Issued

In 2009, two new HIPAA special enrollment events became available as a result of the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA).  These special enrollment events occur when an individual loses eligibility for Medicaid, or the Children's Health Insurance Program (CHIP), or when an individual becomes eligible for premium assistance from Medicaid or CHIP.  Premium assistance means that the Medicaid or CHIP program will pay all, or a portion of, premium for the individual’s employer-sponsored health coverage. 

In both of these instances, the individual has a special enrollment opportunity to enroll in the employer-sponsored health plan.  The individual must be given at least 60 days to enroll. 

Model Notice

Specifically, with regard to premium assistance, the law requires the Departments of Labor and Health and Human Services to develop a notice explaining premium assistance, which must be provided to potentially eligible individuals.  The Model Notice, together with the explanatory guidance , was released last month. 

Of particular note, the notice lists the States that provide some form of premium assistance.  These states are:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

Who Receives the Notice?

The notice explaining the right to premium assistance must be provided to anyone residing in these States, without regard to where the employer is located, or where the plan is sitused.  The employer can provide the notice to all of its employees, or just to those who are residing in the above-listed states. 

When to Provide the Model Notice?

  • For plan years beginning on or after May 1, 2010, the notice must be provided no later than the beginning of the plan year. 
  • For plan years beginning between February 4 and May 1, 2010, the notice must be provided by May 1, 2010. 
  • The notice must then be provided annually thereafter. 

How to Distribute Notice?

The notice can be included in other plan materials, such as open enrollment materials, or a summary plan description.  Alternatively, it can be provided as a separate document.  If the notice is to be included with other plan material, it must be clearly delineated as a unique document. 

The notice can be provided in written form; or, electronically, as long the DOL’s electronic disclosure rules are followed.

Employers are welcome to modify the model notice; though, it is very important that the document provided to affected individuals clearly explains the right to premium assistance; and most importantly, provides at least minimal information about how to contact the relevant State or CHIP office.

Employer Disclosure to State Medicaid and CHIP Offices

In addition to the premium assistance notice described above, the CHIPRA law also requires employers to provide information about its health plan to the relevant Medicaid or CHIP office, upon request.   The form for this disclosure is being developed, and will not be required until further guidance is provided.

 

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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